Pro-Cameron Times changes headline to suit the Tories

After endorsing the Conservatives at the weekend, one would expect the Times to be keen to minimise damaging stories about David Cameron. So imagine the media's surprise when, at 10.20 last night, the next day's front page was sent to them with the headline "Cameron risks backlash with early talk of victory".

The story appeared to encourage the idea that the Tory leader, a man used to getting his own way, is already measuring the curtains for No 10. With the polls still pointing to a hung parliament, surely the Tories could expect a little more support from the Murdoch-owned paper?

Version 1

Well, clearly someone at Wapping thought better of it, because just 45 minutes later a new version was emailed out with the rather bland, neutral-sounding headline: "Cameron outlines plans for first days in power".

That striking claim, "Cameron risks backlash with early talk of victory", was still there but it had been relegated to the standfirst.

Version 2

This isn't the first time that the Times has been caught out by its indecision. After the second leaders' debate on TV, the paper featured a picture of Cameron and Nick Clegg with the headline "Neck and neck". But, after a revised version of the paper's Populus poll put Cameron just a point ahead, the headline had metamorphosed into "Cameron nicks it".

Some will no doubt imagine that James Murdoch or Rebekah Brooks (old Rupe is occupied with the Wall Street Journal these days) put in a call to the paper to demand the revision. But here's the point: they probably didn't need to. Successful Murdoch editors usually internalise the prejudices of their proprietor to the degree that no intervention is required.

[Y]ou don't admit to yourself that you're being influenced. Most Murdoch editors wake up in the morning, switch on the radio, hear that something has happened and think, 'What would Rupert think about this?' It's like a mantra inside your head. It's like a prism. You look at the world through Rupert's eyes.

Either way, the second favourable headline change for the Tories in less than a month begins to raise natural suspicions.

The Autumn Statement proved it – we need a real alternative to austerity, now

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor

John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015.